tv Wall Street Week FOX Business December 18, 2016 9:30am-10:01am EST
>> this is the new "wall street week." ♪ gary: welcome to "wall street week." maria: thank you for being here tonight. the markets hitting new highs to start the week. janet yellen's rate hikes slowing things down a bit in terms of the rally. the dow jones not making it to the historical 20,000 level. regardless entering a new phase with a pro-business whitehouse and it also comes with the fed's key raising interest rates regularly. we are joined by the outgoing
ceo. bob, it was a historic week because the senate raise rates again. only the second time in 10 years. what did you think about what the fed did? >> it was unsurprising. it was expected. we see the prediction. for me, that is the more important fact. gary: a year ago when they raised rates i think that they thought at that time that could be several raises in 2016. i think investors have to take that with a grain of salt. >> all predictions don't exactly come true. >> are looking at market structure and volume. i want to get your take in terms of this rally. we had a little bit of a slowdown this week. but we are talking about record high after record high after donald trump was elected. >> it was amazing to me on election night how the market quickly god to the essence of the situation.
and every prediction was correct. right when the futures were indicating six or 800 points. and then they said we just elected a pro-business president to get about everything else -- would you might have different opinions on. we elected a pro-business president who is going to enact policies. the fact that the republicans maintained and increased controls for the senate and the house added to that. so right now the market is factoring in policies being passed that will be pro-business. we have to give those policies a chance to be passed. >> we are expecting earnings to get a boost of a corporate tax rate of 15%. has it begun to lose steam? >> the first question is bit ahead of itself. the deregulatory effort has not yet happened.
and neither has congress sign anything. the question is what is the probability of these actions and i think that that is what is being released. and you can see and i see more business people than anybody. people feeling good and they are more aggressive in terms of his business plan. gary: one thing that bob greifeld pointed out, it was about 11:30 a.m. or so. when they were showing 800, maria said that it was a tremendous buying opportunity. maria: thank you. i thought as a growth plan, and the growth suite. >> we will get through. gary: i have to ask you about this number. only because it reminds me of something that i know that you are familiar with at 5000 in
1999. so professional investors, these numbers don't mean much. but we get concerned that there is going to be a type of thing associated with this that is going to create short-term fluctuations are not good for the long-term investor. >> i would have to agree with that. but at the moment they can be quite inefficnt b when you have a positive sentiment in the environment, the markets will generally tend to get ahead of themselves and it doesn't matter anything for the long-term investor that you are talking to overtime. you can say let's get to the right important time. but we have had nothing but positive news in the world doesn't work like that. so there will be some setbacks. gary: one thing, the buying and selling everyday on the nasdaq. are you seeing really what i would deem as a healthy institutional buying? there has been some skepticism that this is a machine. do you see this as well?
>> it is important to clarify they use computers to drive their buying strategy. from that point of view we don't really know. everything comes in an automated fashion. and they say colin environment here is about -- that is gone. we have an organized marketplace. i don't have any direct insight. but you certainly see enthusiasm on the ceo and the business side about their prospects and it has to show through earnings in 2017. so the markets are assuming that we will have some strong and robust earnings as we go into this. maria: jpmorgan's analysts said that the decline in the corporate tax rate equates to this of 20%.
and you just spoke to anyone in terms of business leaders and do you expect that there will be an unleashing of activity once the taxes come down and once revelations are rolled back to? >> i think it's impossible to overstate the of images of u.s. economy will have if we have a competitive, global corporate tax rate. we spent the last decade they can about how we can operate in a lower tax environments. if we can stop it, one to make sure it that we can invest in the u.s., that is a wonderful thing. i don't know 20% is the right number, but it's a large number that we can deploy. in return in that capital >> you mention this and we hear about it every single day. how did the animal spirits start to impact the overall economy? how does the feeling good start to show in the jeep key numbers.
>> you know, you have to be representative of actual performance. it starts with business leaders, small business, large business, saying that i'm willing to make that investment. building new factories and spending money. all of those decisions are discretionary. the fact that you can say that i can feel good and that i want to make that positive decision, you are seeing that happen. i think that the donald trump election has released that. gary: stay right there, bob greifeld. "wall street week" will be back in just a moment. ♪ ♪
>> i am here to help you folks do well. you are doing well right now. i am very honored and so right now everyone will have that balance continue. more importantly we want you to keep going with the incredible innovation. gary: the headlines and tech gods descend on trump tower. it included jeff bezos, tim polk, elon musk. and his team on wednesday. maria: making it clear that he wants to bring jobs to america. bob is with us bob greifeld. can the companies bring the jobs back home to be profitable? expect that this tax plan is going to need money from overseas and companies for america? >> i think that donald trump
will be good for the technology industry, as you said, we will be able to repatriate money back. a lot of that is concentrated in the companies. and as he has said before, h1b visas. it's hard for americans to relate to it, there's just not enough people primarily from the high-tech field. and as the nature of manufacturing changes it is of less people intensive. that is more reasonable proposition than it was 10 years ago. gary: i am watching a video, you know the players. most of them listed on the nasdaq. what do you think that they were all thinking when they got to trump tower? what you think happened behind a meeting? >> i would say that the meeting was symbolic. but there's also substance to it. we are saying that we would have a dialogue and that has been a
theme of the donald trump transition. you hear about a large number of people coming in and out of the tower. and so i think of that is in stark contrast to what we have had the last eight years. we are having them have the ability to talk to the white house in hopes of educating and informing and influencing this. the. maria: there are a couple of names he would like to actually see. some big deals on the raisin. some deals have not been great. 2016 was just an okay year for us. give us your forecast. >> i would say 2016 was a little villus than okay. the fourth quarter is turning out to be okay. the year itself was disappointing. there is a strong correlation between companies coming public and the help of the overall market. that is important. we are approaching 20,000 were to be 20,000 which is important
and the companies that have come public this year have done better than the broader market. and that is the best predictor. they directly influence the quantity of ipos. the fact that they had these quality ipos, increasing price, leaving me to be optimistic price for 2017. >> what difference does it make as a stock investor? what difference does it make if my stock is listed at the new york stock exchange. why should i care? >> i think that corporations care the most and that we have services and support for them. i always say that it is a lot more difficult being a public company as compared to a private company. we want to ease them through that transition. we have built up over the last decade and done that uniquely. we are very proud of the fact with respect to retail,
institutional investors that the, we have run this fair and transparent. we will show to you the order and balance and broadcast it to the world, the predicted opening price closing price so that all investors have equal access. and we provide a democratic access to the marketplace. maria: are you schmoozing always be things that won't go public? >> i think it's very important for us to communicate to every prospective issue that we have. so we do that, yes. the answer is yes. i am not making any predictions, but i'm comfortable with this. gary: you are retiring officially in a couple of weeks. the capitalization has been an incredible run. >> 500 million to almost 12 billion.
gary: what is next for you? >> i'm going to remain chairman for a wild. when you see the nasdaq, your schedule is controlled. i certainly want to be as busy as we are today, but in better control of the schedule. gary: that is a great way to say it. maria: i know that we have all of these elections in europe coming up. a lot of companies listed. can you tell me about that? people were not expecting britain to lead the european union. they were not expecting donald trump to leave the presidency. what is most important in terms of these elections on the horizon? >> i think that what you see is people again, the thing is that they express their will and immigration is a big issue in europe as it was in the election in 2016 here. so i'm not going to be in the prediction business as what the outcome is. but i would say that it's somewhat uncertain. gary: thank you, "wall street
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>> you see what's happening with taxes. yes he was happening with regulations which are totally out of control. right now we punish companies for doing business in america. they are actually punished. that's why they are leaving. and by the way i have to say this. we are going to reduce taxes for the middle class. but for our companies. maria: president-elect donald
trump continue his progress message this week. gary: it's entertaining watching him pick his cabinet cabinet is looking like an all-star team from business world so how are some of the big wealthy firms preparing for what's to come after the migration joining us now blackrock -- rick reider. we are looking for 2017 to be higher interest rates and higher growth. is that your forecast as well? >> yeah i think it is. you are starting to watch it play out where the anticipation of people talking about fiscal and infrastructure and that will come however markets are going to start to price in and attacks influences are significant. we talk about marrying corporate tax and versatile texan repatriation. we have lived in a world the last two or three years has been borrowed by factors back. you're going to change the attack shows in terms of the benefit you get from borrowing and the cost of the debt is going up so what happens
companies have invested their business and grow their market share. it's pretty exciting stuff and this is quite frankly for being in the markets as opposed to two years of september and december, now you have divergence and now you have enthusiasm and quite frankly you are seeing companies surveys improved and personal confidence surveys improved so that translates translates to about higher inflation a bit higher interest rates but some pretty good markets. maria: i'm glad you said animal spirits because i feel like we are seeing animaspirits in a lot of areas in the market. i did not see animal spirits from janet yellen last week. what is she looking at that we are not looking at and how do you react to the fed raising interest rates? >> first of all surprising that they were a bit more hawkish than expectations however like you said janet yellen said this in the last meeting. listen i think the biggest day of the year was september 21 where the bank of japan came up
japan came off of negative interest rates help the banks and insurance companies. yellen came out and said we are going to let the economy run hot and then you think about what she's doing now it's uncertainty they don't have to be that fast. we can be behind markets led inflation run a bit hotter in the economy run particularly for hiring more people read wages are growing in the fed when you enter a tightening cycle different than when you're easing the federal reserve's are behind the market. exactly what she articulated is we haven't seen it yet and we can give it a bit more time but their others on the committee and this is why we move from expectations and their others on the committee anticipating growth faster. maria: what does rick reider think in terms of the number of hikes to get next year? >> we came in if you think about where came in this year it was for hikes in you said earlier 64
meetings they have moved twice to move interest rates so i think what they're suggesting three now we think it will be better. think the fed will be behind. i think it's two or three. if the economy picks up faster you bring marx onto the table and get the three hikes. maria: you said we are not going to see a lot of rate hikes. i want to get back to whether or not this is possible what donald trump is trying to do. when we spoke with steven minucci the incoming treasury secretary he predicted 3.5 to 4% economic growth. you are talking about 4% economic growth and that's a different scenario for the federal reserve entire industries. you think that's achievable in the next two years? >> definitely there's a lot of low-hanging fruit in this country. i will play the big one in terms of how you get there as you think about what's really been calling the growth of economy. sven financial transmission.
now you are creating a dynamic that with even with rates that higher you can create velocity and unique velocity to grow the money supply chain. you need the lending mechanism. the lending mechanism is picking up. i think you can create that growth. i think you can create growth taxes of bit less regulation loss to the come you carry it. it all going to come the first quarter of the year? no way. there's the ebb and flow. numbers were disappointing in retail sales not that great. the trajectory is pretty good and if that's achievable and i think as you talked about earlier on your shows the dynamic of how unified government whether republican or democrat gets initiatives through that bernanke has called for a long time we need fiscal. actually we are going to get it. gary: i have to ask you this before let you go. have i said fun guys are smarter than stock guys so what are the bond guys thing about the stock
are get? >> the bond guys are bullish on stocks but i do think stocks are in good shape. you think yes i respect the valuation argument however if you take corporate tax and bring it down and think about where we take corporate tax that's 20% or so the earnings-per-share benefit for companies like financials health care is extraordinary. maria: 20% earnings? >> 25 or 26% growth. maria: of 20% corporate tax rate? >> certainly can do it and in places like health care and financials etc. it's pretty powerful. by the way you think how a company reacts to a better textbook coming in. i know my earnings are going to be better and now i can spend on. there's an enthusiasm that i think is justified. at gannon a lot with the c. and growth is not great. china has risks.
their risk of there but i do think the momentum is justified. gary: just like you want to listen to maria on election night you want to listen to the bond guy. are you back thank you for are you back thank you for i tried hard to quit smoking. but when we brought our daughter home, are you back thank you for that was it. now i have nicoderm cq. the nicoderm cq patch with unique extended release technology helps prevent your urge to smoke all day. it's the best thing that ever happened to me. every great why needs a great how.
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